Business Ethics Exam 3

Laws that Encourage EthicalConduct

(1) 1991 Federal Sentencing Guidelines for Organizations (2) 2002 Sarbanes-Oxley Act 3) Dodd Frank Wall street act

Mandated Requirements for Legal Compliance 1-5

(1) Regulation of competition, (2) protection of consumers, (3) promotion of equity and safety, (4) protection of the natural environment, and (5) incentives to encourage organizational compliance programs to deter misconduct

6 spheres of influence

1. workplace 2. family 3. religion 4. legal system 5. community 6. profession

Trademark Revision Act

Amends the Lanham act to allow brands not yet introduced to be protected through patent and trademark registration

Mandated Requirements for Legal Compliance

Any practice that does not reduce competition or harm consumers or society is permitted

Nationality in ethical decision making

Because of cultural differences, it is impossible to state that ethical decision making in an organizational context will differ significantly among individuals of different nationalities.

Cause related marketing can affect consumer _____, if consumers are sympathetic to the cause and the brand and cause are seen as a good fit.

Buying Patterns

High levels of _____ create a higher probability that firms cut corners because margins are usually low.

Competition

Dodd-Frank Act Provisions

Created new financial agencies Office of Financial Research Financial Stability Oversight Council (FSOC) Consumer Financial Protection Bureau (CFPB) Instituted a whistle-blower bounty program

Federal Trade Commission Act (1914)

Created the FTC to help enforce anti trust laws

Fair Debt Collection Practices Act

Defines permissible debt collection practices

Civil Law

Defines the rights and duties of individuals and organizations

Coercive leader

Demands instant obedience and focuses on achievement, initiative, and self-control

Occupational Safety and Health Act

Designed to ensure healthful and safe working conditions for all employees

Equality Principle

Each person has basic rights that are compatible to the basic liberties of others

internal locus of control

Employees who believe they control the events in their lives by their own effort and skill have a(n)

Laws Promoting Equity and Safety

Equal pay act of 1963 title VII of the civil rights act age discrimination in employment act occupational safety and health act american's with disabilities act

Companies that _____ will most likely be found in violation of procompetitive legislation.

Establish Monopolies

The ethical decision making process includes

Ethical issue intensity Individual factors Organizational factors

Jumpstart Our Business Startups (JOBS) Act

Exempts emerging growth companies from observing the auditor attestation requirements from Sarbanes-Oxley 404(b)

A study has found that those with an external locus of control ​were positively correlated with ethical decision making, whereas those with an internal locus of control were negatively correlated.

False

Which of the following provide incentives for developing core practices within a firm that could help ensure ethical and legal compliance?

Federal Sentencing Guidelines for Organizations, Sarbanes-Oxley Act, and Dodd-Frank Act

Anticompetitive strategies that focus on weakening or destroying a competitor have spurred antitrust legislation and include all of the following except

Free Samples

education and ethical decisions

Generally, the more education or work experience people have they are better at making ethical decisions. The type of education someone receives has little or no affect on ethics.

FTC Improvement Act

Gives the FTC more power to prohibit unfair industry practices

Toy Safety Act

Gives the government the power to recall dangerous toys quickly

external locus of control

Go with the flow, because that's all they can do

What is the first step that an unethical decision has been made?

Guilt or uneasiness

Credit Card Accountability, Responsibility, and Disclosure Act

Implemented strict rules on credit card companies regarding topics such as issuing credit to youth, terms of disclosure, interest rates, and fees

Voluntary Responsibilities benefits

Improves quality of life in communities Reduces government involvement Develops employee leadership skills Helps create an ethical culture

Voluntary Practices

Include beliefs, values, and voluntary contractual obligations of a business All businesses have some voluntary commitments Philanthropy: Giving back to communities and causes

Leadership styles influence organizational behavior

Including employee's acceptance of/adherence to organizational norms and values A challenge for leaders is gaining trust and commitment

The Importance of Institutionalization in Business Ethics

Involves embedding values, norms, and artifacts in organizations, industries, and society

who believed justice principles were beliefs that everyone could accept?

John rawls

Laws Regulating Competition definition

Laws passed to prevent the establishment of monopolies, inequitable pricing, and other practices that reduce or restrict competition among businesses

Externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements are known as

Mandated Boundaries

Public Company Accounting Oversight Board

Monitors accounting firms that audit public corporations

Guarantees whistle-blower protection SOX act

Motivates employees to disclose information in a judicial proceeding against the private employer

Institutional Theory

Organizations operate according to taken for granted institutional norms and rules

Dodd-Frank Wall Street Reform and Consumer Protection Act

Overhaul of the US financial regulatory system

Gatekeeper

Overseers of business actions Accountants, regulators, lawyers, financial rating firms, auditors Are critical in providing accurate information to stakeholders

Federal Sentencing Guidelines for Organizations

Passed in 1991 to create an incentive for organizations to develop and implement programs designed to foster ethical and legal compliance.

Equal Pay Act

Prohibits different pay for males and females for the same work (1963).

Title VII of the Civil Rights Act of 1964

Prohibits discrimination in employment decisions on the basis of race, religion, sex, color, or national origin

Age discrimination act

Prohibits discrimination on the basis of age in federally assisted programs

Criminal Law

Prohibits specific actions and imposes fines or imprisonment as punishment for breaking the law

Clayton Act of 1914

Prohibits specific practices such as price discrimination, exclusive-dealer arrangements to restrict competition

Lanaham Act

Protects and regulates brand names, brand marks, trade names and trademarks

Laws protecting consumers

Pure food and drug act truth in lending act fait debt collection practices act toy safety act children's online privacy protection act credit card accountability responsibility and disclosure act

Categories of laws impacting companies

Regulating competition Protecting consumers Protecting equity and safety Incentives to encourage organizational compliance programs

locus of control

Relates to individual differences in relation to a general belief about how one is affected by internal versus external events or reinforcements

Democratic leader

Relies on participation and teamwork to reach collaborative decisions

Truth in Lending Act

Requires full disclosure of credit terms to purchasers

Children's Online Privacy Protection Act

Requires the FTC to formulate rules for collecting online information from children under 13

Laws Regulating Competition

Sherman Anti trust act FTC Lanham Act FCT Improvement act FCPA Trademark law revision act digital millennium act

The _____ regulates tobacco, dietary supplements, vaccines, veterinary drugs, medical devices, cosmetics, products that give off radiation, and biological products.

The Food and Drug Administration

Leadership

The ability or authority to guide and direct others toward achievement of a goal. Leaders provide a blueprint for an organization's corporate culture and ethics.

Pure Food and Drug Act of 1906

The first consumer protection law was passed in 1906 in response to poor working conditions in factories

Which of the following groups is not a group that receives special legal protections?

The highly educated

strategic philanthropy

The synergistic and mutually beneficial use of a company's core competencies and resources to deal with social issues

For people who begin the value shift that leads to unethical decisions, which of the following is not a usual justification to reduce and eliminate guilt?

This is in keeping with my personal morals and the code of conduct, so it is okay.

________ is the glue that holds businesses together

Trust

there is a

Unclear relationship between locus of control and ethical decision making

Examined how individuals would formulate principles if they were uncertain about their future position in society

Veil of ignorance by rawls

_____ responsibilities relate to a business's contributions to stakeholders.

Voluntary

Core Practice

a highly appropriate and common practice that helps ensure compliance with legal requirements, industry self-regulation, and societal expectations

Voluntary boundary

a management-initiated boundary of conduct (beliefs, values, voluntary policies, and voluntary contractual obligations)

Sarbanes-Oxley Act of 2002

a system of federal oversight of corporate accounting practices. Strengthened penalties for corporate fraud, requires corporations to establish codes of ethics for financial reporting.

Divine Command Theory

a theory asserting that the morally right action is the one that God commands

Natural Law Theory

a theory asserting that the morally right action is the one that follows the dictates of nature

Internal Control

believe they can control events; are masters of their destinies and trust in their capacity to influence their environment

Coaching leader

builds a positive climate by developing skills to foster long-term success, delegating responsibility, and skillfully issuing challenging assignments

What is the 2nd step that an unethical decision has been made?

changing the behavior to reduce such feelings

Pacesetting leader

create a negative climate because of the high standards that he or she sets

Difference Principle

economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society

An organizational ethical culture is shaped by

effective leadership

A major purpose of the Federal Sentencing Guidelines for Organizations, the Sarbanes-Oxley Act, and the Dodd-Frank Act is to

encourage employees to report misconduct.

social entrepreneurship

entrepreneur founds an organization with the purpose of creating social value.

obedience to authority

explains why many employees resolve business ethics issues by simply following the directives of a superior

People who believe in _____ go with the flow because they feel the events in their lives are uncontrollable.

external locus of control

Mandated Boundary

externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements

instrumental concern

focuses on positive outcomes, including firm profitability and benefits to society.

compliance costs

have reduced over the years

normative approach

how organizational decision makers should approach an issue

Institutionalization helps

implant values, norms, and artifacts in organizations, industries, and society

moral intensity

individuals' perceptions of social pressure and the harm they believe their decisions will have on others

Authoritative leader

inspires employees to follow a vision, facilitates change, and creates a strongly positive performance climate

Studies have found that more than a third of the unethical situations that lower and middle-level managers face come from _____.

internal pressures and ambiguity surrounding internal organizational rules.

Better Business Bureau (BBB)

is a core practice, a leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases

Research concerning nationality and the ability to make ethical decisions

is hard to interpret in a business context because of cultural differences.

Foreign Corrupt Practices Act

makes it illegal to pay foreign government officials to facilitate business or to use third parties such as agents and consultants to provide bribes to such officals

Following the ethical directives of a superior relates to

obedience to authority

According to the ethical decision-making framework, the absence of punishment provides a(n) _____ for unethical behavior.

opportunity

Multiple elements work on individuals to affect their behavior. While an individual may intend to do the right thing, _____ can alter this intent.

organizational or social forces

Americans with Disabilities Act

prohibits discrimination against the disabled

Title VII of the Civil Rights Act of 1964

prohibits discrimination on the basis of race, color, sex, religion, or national origin.

Sherman Antitrust Act

prohibits monopolies

Laws Promoting Equity and Safety definition

protect the rights of minorities, women, older persons, and disabled persons

Digital Millennium Copyright Act

refines copyright laws to protect digital versions of copyrighted materials, including music and movies.

ethical culture

reflects the integrity of decisions made and is a function of many factors, including corporate policies, top management's leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior

Laws protecting consumers definition

require businesses to provide accurate information about products and services and to follow safety standards

Auditor and analyst independence

section 201 prohibits registered public accounting firms from providing both non-audit and audit services to a public company

Age in Ethical Decision making

several decades ago, it used to be, the older you were, the more ethical you were.

An ethical corporate culture needs

shared values and proper oversight

ethical awareness

the ability to perceive whether a situation or decision has an ethical dimension

Hermeneutics

the branch of knowledge that deals with interpretation, especially of the Bible or literary texts.

opportunity

the conditions in an organization that limit or permit ethical or unethical behavior

Ethical Intensity

the relevance or importance of an event or decision in the eyes of the individual, work group, or organization.

corporate culture

the set of values, ideas, and attitudes that is learned and shared among the members of an organization

Gender and Ethical Decisions

there are no differences between men and women. however when differences are found, women are generally more ethical than men.

significant others

those who have influence in a work group, including peers, managers, coworkers, and subordinates. They help workers on a daily basis with unfamiliar tasks and provide advice and information in both formal and informal ways.

cause-related marketing

ties an organization's products directly to a social concern through a marketing program

Affiliative leader

values people, their emotions, and their needs and relies on friendship and trust to promote flexibility, innovation, and risk taking

Immediate job context

where they work, whom they work with, and the nature of the work